Gov. John Kitzhaber wants to give Oregon Health Plan a boost with better, less costly care

View full sizeRoss William Hamilton, The OregonianThomas and Kay Dickerson both have serious health problems and are on the Oregon Health Plan. If Gov. John Kitzhaber gets his way, their health care will be streamlined and preventative, resulting in better care and away from more serious health crisis.

Katrina blew the roof off her New Orleans home, but Kay Dickerson still had her health -- until she moved to Portland.

She survived the hurricane only to get hit with post-traumatic stress, depression, high blood pressure and diabetes. With help under the Oregon Health Plan, the retired 57-year-old librarian went to one state program for therapy, another for medical care and others for dental and eye care, each with its own budget and rules.

Gov. John Kitzhaber wants to streamline all that – and build a better, less-costly health plan in the process. If his plan prevails in the Legislature, Dickerson will get all her care from a single team called a coordinated care organization. Her physician, eye doctor, dentist, nutritionist and therapist will be on the same team. They will focus on keeping her healthy rather than waiting until she's sick.

The team will operate with a lump sum of state money to spend as it chooses. And it will focus on patients like Dickerson whose multiple health problems could need costly hospital care if not controlled.

At the same time, the Senate and House health committees are working on a measure to give all Oregonians access to health care by 2014 through an insurance marketplace called an exchange. It would work as part of the federal health reform passed last year.

The Legislature also is looking at bills to reduce administration costs, simplify paperwork, increase scrutiny of insurance rate increases, limit medical liability and study whether the state could give all Oregonians health care with a sales tax.

Lawmakers are tackling health reform at a time when they also are wrestling with a $3.5 billion budget gap and bills to restructure all levels of education. The major overhaul comes with the session already half over.

As revenue shrinks, costs are climbing for Medicaid, which partially pays for the Oregon Health Plan, for which low-income residents must apply. Oregon faces in 2011-13 an $860 million gap between funding and costs for nearly 600,000 people on the Oregon Health Plan, a 39 percent cut.

Kitzhaber has proposed to cut $570 million with traditional tactics -- reductions in administrative cost and health plan benefits and a 19 percent cut in Medicaid payments to doctors and other providers. But he doesn't want to kick people off the plan as other states have. Instead, he wants to close the remaining $290 million gap by saving through reform.

"The only way out of this is to innovate or die," said the governor, also a physician.

Two months ago, he formed the Oregon Health Systems Transformation Team, 46 legislators and leaders from all sectors of health care. The team met on Wednesday nights for eight weeks, building on work of reformers over the last six years, and settled on the coordinated care organization as the foundation of its health transformation plan.

If the Legislature approves the plan, the hope is to have them up and running by July 2012 for Oregon Health Plan members.

LABORATORIES OF INNOVATION

Health officials hope coordinated care teams will be laboratories of innovation. Beginning with people on the Oregon Health Plan, the care teams will focus on the 20 percent who account for 80 percent of health care costs, said Bruce Goldberg, director of the Oregon Health Authority.

People with multiple chronic health problems such as congestive heart failure, asthma, diabetes and substance abuse drive up hospital costs and insurance rates for everyone. A clinic in Bend saved more than $1 million in the last year with coordinated care for 120 high-cost patients on Medicaid, which reduced hospital stays, said Mike Bonetto, the governor's health care adviser.

Dickerson, the hurricane survivor, has aggressively sought health care and it has paid off. "I no longer have high blood pressure, and I have my diabetes way under control," she said.

But some low-income patients cut corners by skipping medication and doctor visits until they land in the emergency room. State health officials are seeking waivers from federal rules so coordinated care teams can spend money in new ways. In exchange for that freedom, the teams will be held to state standards for results. They might pay for a patient's bus ride to a doctor or hire a health coach to help manage chronic illnesses.

"Right now health care pays for office visits, yet there are many things that could get handled through telephone calls and email," Goldberg said.

Kitzhaber's team hopes to enlist everyone on the Oregon Health Plan in coordinated care organizations, with state workers to follow. Eventually, the idea may expand to private insurance.

Greg Van Pelt, the Oregon chief executive for Providence Health & Services, said Oregon's health industry will struggle to make the kind of changes Kitzhaber wants.